Mega merger could spell end for NZDB
NEW ZEALAND –, The New Zealand Dairy Board (NZDB) could disappear if a proposed merger between New Zealand Dairy Group and Kiwi Co-operative Dairies, New Zealand’s two largest dairies, gets the green light.
An agreement, signed by the chairmen of both companies last month, reveals plans for the NZDB to be integrated into the new super-dairy, to be known as Global Dairy Company (GDC). The Board will be stripped of its statutory powers and export monopoly within a year of the merger taking place to make it possible for GDC to be wholly owned and controlled by New Zealand farmers.
All assets of the NZDB are to be integrated into the GDC in an effort to create annual efficiency gains worth up to NZ$300 million (140m euro). New Zealand Milk, the NZDB’s consumer products unit, although it will be owned by GDC, is to become a separate entity with its own board of directors. The merger will be effective from 1 June 2001, subject to approval by shareholders and New Zealand’s monopoly authorities.
The new agreement is the second attempt by New Zealand Dairy Group and Kiwi to merge. Talks in March last year failed when the two dairies could not agree on valuations of their respective businesses.
News of the planned merger coincided with the surprise departure of the NZDB’s chairman, Graham Fraser. In a statement he expressed his “profound satisfaction” with the proposal but said it was an appropriate time for him to step down. John Roadley takes his place with immediate effect.
